Sterne Agee upgraded Groupon (NASDAQ: GRPN) from Neutral to Buy and announced a $9.00 price target.

Sterne Agee said, "This is an out-of-consensus upgrade predicated on a more constructive longer-term view of the company and is not a call on the company's upcoming 4Q results. We recognize that meaningful risks remain, the stock will be volatile and we may be a bit early. However, we believe the risks are well known and largely priced in. The stock is trading at ~an 80%/60% discount to its peers based on 2014E EV/Sales and EV/EBITDA bases, respectively."

Groupon closed at $5.29 on Tuesday and is up seven percent pre-market on this news.